Why Berkshire doesn't deny rumors ... even when they're false
| Berkshire's Rorschach: What do you see in these words? On Tuesday morning, Boeing shares were up as much as 2.8% on sketchy market "chatter" that Warren Buffett was using some of Berkshire's $128 billion in cash to build a stake in the troubled aerospace giant.  Generally, when we contact Berkshire about rumors like these, we either get a "no comment" or no response at all.
This time, we were directed to item #13 in the Berkshire Hathaway Owner's Manual, which was first issued in 1996. (If you haven't read it yet, I strongly recommend you give it a read. It's an excellent summary of the principles Buffett and Charlie Munger have long used to run the company.)
Here's what item #13 says:
"Despite our policy of candor, we will discuss our activities in marketable securities only to the extent legally required. Good investment ideas are rare, valuable and subject to competitive appropriation just as good product or business acquisition ideas are.
"Therefore we normally will not talk about our investment ideas. This ban extends even to securities we have sold (because we may purchase them again) and to stocks we are incorrectly rumored to be buying.
"If we deny those reports but say "no comment" on other occasions, the no-comments become confirmation."
We reported it as Berkshire neither confirming nor denying the rumors.
That's a straightforward summary of what the words say.
But some of the words jumped out at me more than the others: "This ban extends even ... to stocks we are incorrectly rumored to be buying."
My perception, and it's just perception, may have been influenced by the fact that I can't personally remember unsubstantiated and vague market rumors of Buffett buying ever turning out to be true.
There's also my sense that Buffett wouldn't be all that interested in a company that just ditched its CEO and still faces enormous financial and political pressure connected with the crashes and subsequent long-term grounding of its 737 Max jets.
Boeing's price spike didn't last very long. By today's close, it was down a little less than 1% on the week.
We probably won't know for sure about Buffett and Boeing until mid-May when Berkshire will be files its SEC-mandated disclosure of the publicly-traded U.S. stocks in its portfolio as of the end of March.
Author of popular Buffett book dies at 79 Janet Lowe, author of a well-known book about Warren Buffett, has died at the age of 79, reports The San Diego Union-Tribune.
"Warren Buffett Speaks: Wit and Wisdom from the World's Greatest Investor," published in 1997, was a USA Today and Business Week bestseller, according to the newspaper.
Buffett and Lowe both admired Benjamin Graham, Buffett's value investing mentor.
Lowe wrote 23 books, focusing on wealthy people who were not "inheritors." Instead, she told the Union-Tribune in 2000, they had "a particular talent that they recognized very early in their lives, and they concentrated on it."
BUFFETT AROUND THE INTERNET Some links may require a subscription
BERKSHIRE STOCK WATCH
  BERKSHIRE'S TOP STOCK HOLDINGS
 Berkshire's top stock holdings by market value, based on today's closing prices. The number of shares held is as of September 30, 2019, as disclosed in the company's November 14 13F SEC filing.
The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.
QUESTIONS OR COMMENTS
Please send any questions or comments about the newsletter to me at alex.crippen@nbcuni.com. (Sorry, but we don't forward questions or comments to Buffett himself.)
If you aren't already subscribed to this newsletter, you can sign up here.
-- Alex Crippen, Editor, Warren Buffett Watch
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Post a Comment